Friday, March 30, 2007

Talk about an equivocal week -- market speak with forked tongue. Look at those prices. Every market stands on almost the same spot where it stood last week.

SILVER & GOLD are both talking out of both sides of their mouths. As long as gold holds above yesterday's low at 655 and silver holds above 1309 (notwithstanding a quick spike beneath & immediate recovery), we're okay. We might see that spike early next week. If so, both metals should then pierce the 667 & 1340 resistance that has so long stymied them.

That US DOLLAR INDEX looked to be forming a platform from which it might climb, but today fell face-plant fast on the platform. Any lower and it continues down to 80.50. On the other hand, if Monday it wakes up, then 'twill have begun a rally. Needs to climb over 84.25 to prove it, though, and not fall through 82.90.

What about STOCKS? I can smell confusion when the Dow closes up a few points and the S&P500 down a few. Factually, the Dow has been locked in a downtrend since 27 February: lower lows & lower highs. Fact. It needs to clear 12,500 to confirm a trend change upward. Whether it rallies further or not, stock investors have overstayed their welcome. The bear is hungry, and eager to eat your money. Swap stocks for silver & gold.

I am intrigued to note that the DOW IN GOLD DOLLARS sank this week, and has moved away from its 200 day moving average, preparatory to dropping like a holstein cow pushed out of a C-147 cargo plane.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Thursday, March 29, 2007

GOLD PRICE made a low today at 655. It is in a correction now, having apparently topped yesterday (that leaves 667 as the upside point to pass). Next few days gold should trend lower.

SILVER PRICE Plainly peaked yesterday and posted a low today of 1309. The first leg of this correction may have ended today, so there will be another push up, then one final leg down. It ought to be over by end of next week.

Gold and Silver prices must act soon to go to new highs or drop into a deeper correction. Meanwhile, the indicators I watch are all pointing to higher prices so I think this correction ought to be over quickly. This is the bull market climbing that wall of worry.

Maybe the saber rattling towards Iran is confusing every market?

The US DOLLAR INDEX chart now shows a December low at 82.35 and last week's low at 82.65, looking suspiciously like a double bottom. The last few days it has been testing the low and made a series of higher lows -- an uptrend, puny though it be. Somebody big buys down there at 82.9-something. The buck is way too calm, and ready for something to happen upside. I think the danger of a new low is now past, for the nonce.

Stocks show a double bottom today with yesterday in the 12,265 area. 'Twill move higher in the next few days. Lots of room to move before it becomes terribly overbought again. Notwithstanding, swap stocks for silver & gold. Did y'all ever hear of Cato the Elder?

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Bull markets always climb a wall of worry. That's what y'all are seeing now. One day everyone will ask himself, "Was I crazy? Why didn't I buy it then?"

The DOW IN GOLD DOLLARS today slipped down toward G$380 (18.38 oz) & away from the 200 day moving average, like a shipwreck victim slowly running out of energy. When the DiG$ falls below G$369 (17.85 oz) it will quickly begin falling toward G$330 (15.96 oz).

Does it seem odd, even alarming to you that STOCKS cannot hold onto their gains? There's a big day, big fluff amongst the stock gurus (read: those who make their living from stocks) then stocks balk, stall, & within a few days give back their gains. Chir'ren, this is not a market in a primary uptrend, but a stalling market getting ready to roll over & turn down. Notice that today the Dow couldn't hold above 12,300, weighty support now become resistance. How many ways can I say it? Aktien gegen Silber & Gold austauschen! Swap stocks for silver & gold!

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Tuesday, March 27, 2007

Today's GOLD PRICE high was 665.40, and in the past 4 trading days it has been turned back twice at that level (667 resistance). Gold looked poorly into the close, but came back $2.60 in the aftermarket. What's going on? I don't know, but the strength looks very good. I was thinking that gold would have to back off for another run at 667, but maybe tomorrow will be an up day. Somebody thinks so, or the price wouldn't be rising in the aftermarket.

The SILVER PRICE, too, had a rough day, down 13 cents to close at a cliffhanging 1321. Then in the aftermarket it's up a lot at 1333 cents. Often a price change in the aftermarket means nothing, but this looks right vigorous.

STOCKS looked flabby today, although that doesn't say they won't go higher. I don't want to own them anyway. Swap stocks for silver & gold.

The US DOLLAR INDEX closed below 83 again today, but higher than the last time. Will it go lower tomorrow? The trend flows that way.

It was a lazy day talking out of both sides of its mouth. Most likely we'll see higher metals prices this week.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Monday, March 26, 2007

The GOLD PRICE recovered from its Friday break handily to knock again on the door of 667. Floor has now risen to 656. Trouble will be had fighting through 667 to 685, but there's little reason to expect gold won't soon be hurtling through 720.

The SILVER PRICE also handily rebounded from Friday's whuppin, and now 1310 has become the new floor. Silver must scrap all the way through to 1425, but big bar fights and broken bottles lurk at 1350 & 1380. Silver's tough. She'll make it.

GOLD/SILVER RATIO hasn't moved yet. If I have it right about silver & gold's direction, that ratio ought to begin to fall soon.

Last week the Dow climbed through 12,300, so stocks ought to have some sort of run here. How high? Maybe to the old high, maybe almost to the old high. Leaves me wondering how many of y'all know that during the 1920-1923 German hyperinflation that the German stock market rose 23 quadrillion percent? Wow, some performance, huh?

Only problem was, the Reichsmark fell to 1/1-trillionth of its 1914 gold value. Against gold the German stock market lost about 60%. As I was saying, Swap stocks for silver & gold.

The US DOLLAR INDEX may be making a species of bottom around 83.05. If it breaks that, it could fall to 80.50. If it holds, it could climb to 86.5. Odds stand with the lower price. Swap dollars, too. Argentum et aurum comparenda sunt ---- Gold and silver must be bought.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Thursday, March 22, 2007

GOLD & SILVER PRICES are worrying their way to their break-down points that began this correction. Gold needs to clear 667, then 685 (closing basis) to prove its rally has begun again. Silver is facing 1350, 1380, and 1425. Looking at the charts and other indicators, metals strike me as ready to rise.

Next week silver and gold prices will be tackling the old highs -- 1500 and 720 -- or at least the approach to the old highs. Still appears that 1800 - 2400 silver is possible by end-June, and $900 gold.

Speaking of gold, for more than a year premiums have been dropping on numismatic coins, especially the US $20 gold pieces in circulated grades (VF, XF, AU). Now the lower grades are trading -- believe it or not -- at the same price as Krugerrands! At that price I would certainly buy them. Remember that US$20s do not contain a whole ounce of gold, but only 0.9675. To figure out the price per ounce, divide the coin price by 0.9675. We have a few $20 Liberty type on hand, but on a first come, first served basis.

The rally in stocks probably has a ways to run, & may even challenge the old high. A warning sign, however, is the Dow's volume drying up on the present rise. Bad juju. If you still own stocks, this is quite literally the "last train out." Get rid of them. Swap stocks for silver and gold.

The Dow in Gold Dollars days ago dropped below the 200 day moving average, but hasn't yet fallen away from it. That should happen shortly, and the fall in front of us will be tremendous.

The US DOLLAR INDEX crept -- crept -- back over 83, but not by much. The long term chart looks terrible. Later this year it may break that last low (80.36) and 35 year old resistance at 77- 80. However, the dollar has set itself up for a countertrend rally, but don't expect much.Argentum et aurum comparenda sunt ---- Gold and silver must be bought.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Tuesday, March 20, 2007

The GOLD PRICE, right on cue, rose over 657 resistance to close at 657.90. The SILVER PRICE, too, obliged my wishes and rose 13.8 cents to close at 1328.50 cents, not quite my 1330, but close enough.

Y'all bear in mind that when silver reaches 1350 - 1380 & gold reaches 667, the short sellers will pour out of the woodwork like roaches after a sloppy wedding. Be ready for another correction or at least a big fight at those levels. I may be the only person in the world who thinks so, but all I can see in those charts are higher silver & gold prices.

Don't things depend an awfully lot on how you look at them? Some people might look at the Dow Jones Industrial Average's performance today and say, "Wow. Up 50.15 points." On the other hand, people (like me) might say, "Wow. Couldn't get through 12,300 again." See -- it's all in how you look at it. I'm beginning to wonder if stocks really can get any closer to the last high. Well, I'm going to say it one more time, while there's still time: Swap stocks for silver & gold.

By the way, here's a little piece of research for y'all. From the bottom in 2002, the S&P has risen 45.5%, the Dow 35.2%, gold 77.2%, and silver 192.5%. Silver has actually risen 65.2% against gold.

The DOW IN GOLD DOLLARS moved off the dime today and fell to G$385.73 (18.67 oz). Could be about to drop sharply, that is, gold might rise sharply against stocks, or stocks might drop sharply.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Monday, March 19, 2007

SILVER & GOLD PRICES might have given us more encouragement today, but didn't. Silver rose 2 cents and gold 50 cents. In the swampy, muddy resistance they are working through, that almost amounts to a loss. Both metals may have to retreat once more to make another charge at 1330 and 653 - 657. On the downside, that retreat will be fine so long as it holds 1240 and 636.

A declining market shows us the progress of hope's death. Morale reaches a low, then some encouraging sign appears on the horizon. Hope revives, taking prices with it. But hope soon runs out of steam, and gives up again. On a chart this traces out a pattern of lower lows & lower highs.

And that pretty well explains what the Dow is doing right now. Hope revives for four or five days, labours higher, then collapses & gives up all that gain in a day. Today the Dow rose 115.76, making up about half its loss for last week. Chances are it will fiddle here a day or so, then head lower again. On the other hand, last week's trading might have put in a double bottom around 12,050 and it might rally further from here. Still possible in the next 3 months or so is a rally to the old high before the decline begins in earnest. Either way, stocks' days are numbered.

The DOW IN GOLD DOLLARS at G$386.98 (18.72 oz) remains below strong resistance at G$390, but hasn't fallen off yet either. Nonetheless, I would still trade stocks for silver and gold now. [Y'all have written to ask how I figure the Dow in Gold Dollars. Multiply the gold price by 0.048375. That is the cost of one gold dollar in paper dollars. Then divide that into the Dow, and the resulting figure is the Dow in Gold Dollars. To convert gold dollars to ounces, multiply gold dollars by 0.048365, or divide by 20.6718. I use gold dollars so that can look back on the Dow to 1896 with one unchanging standard.]

Talking to a banker last weekend I felt like I'd been slugged in the stomach with a giant lug wrench. I knew that credit guidelines were very loose, witness the subprime mortgage market. But these lunatic loans are not subprime, they are subhuman. Oh, if the debt once starts collapsing in on itself, what will be the end thereof? All of us -- innocent & guilty alike -- will pay for 83 years of lies in a few minutes of truth.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Friday, March 16, 2007

This is one of those weeks that (at least) seem clear. Metals finished a correction & began rebounding, while stocks & the dollar fell again.

SILVER finished the week well. On Wednesday it defended lows a second time, this time 1254 cents. Climbing over 1300 today showed strength, since significant resistance challenged silver from 1306 to 1310, and it closed at 1312. It has now kissed the bottom line of the trading channel without breaking thorough.

Above us lurks the 50 day moving average at 1329, where also resistance is nestled. Therefore a close over 1330 will send silver up to challenge 1380 and 1400. On the downside, silver must hold 1287.

GOLD behaved much like silver this week. It kissed off the bottom of its channel and defended 636 for the second time. Today's close above 650 only makes me long for one above 667.

Metals are still not altogether out of the woods and in the bright sunshine, but they are walking towards it.

The GOLD/SILVER RATIO closed down slightly this week, consistent with rallying metals.

Want to give your ulcer some real trouble to chew on? The long term support in gold lies at 525 and in silver at 900 cents. Right -- they could fall to those levels without breaking below their bull market uptrend. I don't expect that, but it gives you an idea how mild the correction just passed really was.

STOCKS spent 5 days climbing from 12,063 to 12,318, then gave all 242 points back in a single day. Right now 12,050 has proven to be support. It will probably be tested again next week, and might give. The absolute bottom line support that the Dow must hold is 11,200. Because stocks form such a huge market it takes them a while to roll over. There is probably yet another rally lurking in stocks, to test the last all-time high and post a firm double top. Get ye out while time abides.

The DOW IN GOLD DOLLARS shows quite plainly what happened this week: stocks yielded again to gold. The DiG$ is in a precarious position, and next to come should be a large drop. Swap stocks for silver & gold while you still can.

Evidently the US DOLLAR INDEX intends to knock again on the door of its lows, namely, the December low at 82.35. Today's close was the lowest yet, in a string of lower highs & lower lows, which, in Tennessee at least where we call a hog a hog and a dog a dog, is called a downtrend. The buck could drop as low as 80.50. Thereafter is a rally possible? We'll see, but we have a while to wait.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Thursday, March 15, 2007

Today the SILVER & GOLD PRICE rallied together, closing up 24.70 (1298.7 cents) and 4.80 (645.7). What must they do from here?

First, it's likely (not unlikely, to use a figure of speech called litotes) that they will fall back briefly to touch back to their bottom before they take off. For gold, a close over 650 is the first barrier, then 667. For silver, 1310, then 1380.

Risk walks with you wherever you go, regardless where you pick up the road, so there's risk here, too. But I would buy silver & gold at these prices.

Today's move in STOCKS, the Dow up 26.28, doesn't mean much. That probably marks the extent of the rebound off the lows, and the Dow will now fall back to re-test recent lows around 12,050. It will keep on re-testing until it falls. I'm beginning to think we have seen the highs of the recovery. Swap stocks for silver & gold.

The DOW IN GOLD DOLLARS fell today. Having failed at G$436 (21.09 oz), at G$425 (20.56), and G$400(19.35 oz), the DiG$ is now working on failure around G$390 (18.87 oz). However, there's very little support beneath it, so when it plunges it will be fast & bloody.

Thanks to all of y'all who wrote to express your sympathy for the loss of our Great Pyrenees dog. In the 9 years she lived with us, Cleo was a great dog, full of peace, smiling to meet us, rich in puppies who still bless many lives, fierce with coyotes, gentle with children. I saw her once dancing with our male Pyrenees, Orion, in the twilight pasture. Dancing. I will never forget it.

I take great comfort in the words of Psalm 36, "The Lord shalt save both man & beast: how excellent is thy mercy, O God!" If God himself is not ashamed to care for beasts, why should I be?Argentum et aurum comparenda sunt ---- Gold and silver must be bought.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Wednesday, March 14, 2007

Sorry, this will have to be quick. Just learned some leadfoot hit and killed one of our Great Pyrenees. We've had her nearly eight years. I have to go help my son bury her. I hate death, and I loved that dog.

My friend Bob L. called today, all excited. Bob is an accomplished Elliott wave analyst, an art to which I am blind, like ballet. He was excited because he had seen in today's GOLD and SILVER trading an indication they had completed their correction.

It is interesting that both are strongly higher in the after market, after successfully defending lows at 636.30 and 1254 cents today. Bob could well be right. I bought today. I just wouldn't want to be short right here. If I'm wrong the bottom ought to be about 1225 and 635, not too far away to risk.

The US Dollar piddled again today.

The Dow made a low today at 11,939.61, but closed up 57.44 points at 12,133.40. That's about a 50 point cushion above support. Once again, if it breaks 12,000 on a closing basis, it will fall hard. Swap stocks for silver & gold. Argentum et aurum comparenda sunt ---- Gold and silver must be bought.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Tuesday, March 13, 2007

Seems pretty clear from today's trading & the lower prices in the aftermarket that SILVER and GOLD look for lower prices tomorrow. If the gold price doesn't stop at 643.60, the last low, then it will drop quickly to 636, or even to the 200 Day Moving Average (DMA) at 622. The silver price has support at 1250 and the 200 DMA, 1226.

Eeek! Eeek! Silver & gold are falling! So? Every market goes up and down, zigs & zags, advances & corrects. Nothing I have seen so far in this silver & gold price correction leads me to believe it is anything other than a normal correction.

Also let me warn you that my "targets" are merely targets. The market might hit those, and might not. You pick a price you can be satisfied with, & buy there. This week is your chance. Watch closely.

Five days were needed for the Dow to climb from 12,063.63 to 12,318.62 -- rough the way & dark the night. But in one day alone the Dow lost 242.66 points and slid down to 12,075.96 today. This level just above 12,000 is the breaking point. If the Nice Government Men on the Pluge Protection Team (Masters ooof theeeee Yoooo-ni-verse! Hear the super-hero music in the background?) cannot staunch the bleeding at 12,000 tomorrow, then it will rise up to the horse's bridles and wash through the streets. No matter today or tomorrow, the blood will flow. Swap stocks for silver & gold -- quickly.

The DOW IN GOLD DOLLARS has now twice failed to clear G$390 (18.87 oz) and resumed its downward flight today.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Monday, March 12, 2007

The GOLD PRICE today fell 1.60 while the SILVER PRICE rose 11.5 cents. One closes up, one closes down -- this bewilderment points toward weakness as the market can't make up its mind which way to move. Notice that neither metal crossed any crucial boundaries, but left us still in unresolved suspension. I guess this indecision will resolve in a downward spike, over by the end of this week. Simultaneous closes above 1325 & 667 would kill that interpretation & restart the rally.

The US DOLLAR INDEX today proved its weakness by failing once again to pierce 84.25. It fell below 83 once more. Flee the dollar & all dollar- denominated assets while you still can.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Friday, March 09, 2007

The GOLD PRICE did well this week, with a high close of 653. However, next week may bring the real beating. Low close for this correction so far has been 636.70. so watch that number. Any close below that would tug gold toward revisiting its 200 day moving average around 625. If, on the other hand, gold closes above 667, the danger of another fall would be past.

The SILVER PRICE lagged gold this week, as evidenced by the rise in the GOLD/SILVER RATIO. Unless silver can climb above 1325 cents then it, too, will be a candidate for a ride to the 200 DMA, now about 1232 cents.

Long term nothing has changed for the metals. We are witnessing a correction, which is normal but unpredictable. That correction's appetite should be filled at the 200 DMA. Keep your eyes open for more buying opportunities. Bottoms in this bull market have tended to be very swift, v-shaped affairs.

The Nice Government men on the Plunge Protection Team had their work cut out for them to raise the Dow up off its bed of pain. They hit one good day, and then the down wilted the rest of the week, unable to get its leg over 12,300. Maybe next week. Outlook for stocks is a rally to near the high, then collapse without looking back. If the Dow drops below 11,200, then all bets are off and the free-fall has begun. Take this last opportunity to get out of stocks. The best plan would be to swap them for silver & gold, but even if you don't do anything better than selling stocks for US dollars (which is not a good plan), at least you won't sink with stocks.

The DOW IN GOLD DOLLARS is fiddling around the G$390 (18.87 oz)level where it fell off. It may reach through that to rally to more powerful resistance at G$400 (19.35 oz). Gold weakness next week might make that possible, but the trend is firmly down and the fall, once it starts, will be spectacular.

The US DOLLAR INDEX poked its head above 84 this week, & likely will climb to 84.5 before it completes its reaction. A close above that level would signal a possible rise to 87.5, but before anything like that happens I expect to see the buck lower once again. Argentum et aurum comparenda sunt ---- Gold and silver must be bought.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Thursday, March 08, 2007

Some people may have been pleased with today's SILVER and GOLD trading, but I wasn't one of them. Sure, both closed higher, but not much. Both look logy & tired & draggy. Tomorrow would be a good time -- when all the New York traders are closing out profitable positions for the week & thinking about the suburban martini waiting for them -- for metals to stumble. After what they've suffered in the last 10 days, they still want to find firm footing. A short correction back to 645 for gold and 1280 or 1250 for silver would provide that.

By the way, premiums are rising on US 90% silver coin, which hints at dealers becoming more reluctant to turn loose of them. That implies good things -- higher prices -- lie in silver's future.

The US DOLLAR INDEX today climbed back above 84. We are impressed. Might reach 50 day moving average at 84.5 before it resumes dropping like your car keys out of a bass boat to the bottom of the lake.

STOCKS challenged Dow 12,300 today -- and failed. Perhaps tomorrow. This rise toward the last high & rollover downward will take a while. Meanwhile the DOW IN GOLD DOLLARS has turned down again, having touched back to the 200 DMA about G$390. The DOW IN SILVER OUNCES has behaved much the same, except it didn't even reach its 200 DMA before it turned down again. What message does all this send? Swap stocks for silver & gold.Argentum et aurum comparenda sunt ---- Gold and silver must be bought.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Wednesday, March 07, 2007

A reader asked me why it seemed the SILVER PRICE and GOLD PRICE were moving in step with stocks, instead of contrary to them. Answer is, stocks & metals don't move in lock step against each other every single minute, but generally over time in a primary trend lasting decades. It's not unusual for them to run together, even for quite some time. The recent selling panic in stocks probably induced gold selling as investors threw profitable investments into the fire to meet margin calls or just to flee to cash.

Silver & gold performed exactly as needed today to confirm they will move higher. However (there's always one of those, isn't there?) neither one has cleared the woods, and won't until they beat recent highs, namely, 686.50 in gold & 1469 in silver. Until then, the chance always hangs over our heads that this might be part of a much larger correction.

Another reader asked me how the Nice Government Men on the Plunge Protection Team work to manipulate the stock market. Basically, they panic the shorts (those who have sold stock they don't own, betting that the market will drop much more and they can buy back the stock they sold cheaper than they bought it) & create a buying panic.

Rather than buying stocks, I suspect that the NGM buy futures contracts for stock indices. As the index futures contract rises, watching arbitrageurs see a discrepancy growing between the price of the index futures contract & the underlying stocks, making the stocks appear cheaper than the index. It's a locked-in profit to buy the undervalued stocks and simultaneously sell the overvalued index futures contract.

As stocks rally, the shorts begin to panic, first puking into their wastebaskets, then rushing to buy & cover their shorts at any price. Then watching bulls see the market rising, & they start buying again. The buying panic has taken hold.

How do the NGM get out? Simple. After a few days of rising prices, just sell the futures contracts they are long. There's ne'er a fingerprint left.

This is the same trick that the Fed used in 1987. To suppress gold, they waited until the market closed, then sold platinum futures in the very thin aftermarket. Seeing platinum drop scared off potential gold buyers & gold longs. Again, no fingerprints.

So, after yesterday's big rise stocks took a breather today. The Dow's performance was instructive -- all that effort only to have stocks fall below their starting point. The rally will continue, but weakly as the buying runs out of steam. The definitive break has already occurred; the rest -- the long, bloody decline -- is just cleaning up and following through.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Tuesday, March 06, 2007

Now here's a thorny call for the SILVER PRICE and GOLD PRICE. They just might have put in their bottom yesterday, but today's closes, strong as they were, don't really break out above any significant levels. However, with gold climbing above 640 again, and silver knocking at the door of 1300, it certainly has a better than 50% shot of closing higher tomorrow. A failure tomorrow would of course say that both metals are going lower. Meanwhile, cover any shorts. Silver & gold could rally as fast as they fell, although I expect a gentle up movement the rest of this correction.

Buying silver & gold here could turn out to be a fabulous choice, or a lousy one.

STOCKS (as represented by the Dow) rallied along all day, with ne'er a hiccup. Looks like the Plunge Protection Team's invisible hand. Tomorrow it runs into resistance at 12,250. I expect the rally to continue.

The DOW IN GOLD DOLLARS went nowhere today, unable to climb & pull away from the 200 day moving average. Expect more downside. Your last warning has sounded. The gates are closing. Swap stocks for silver & gold.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Monday, March 05, 2007

Let's think about the GOLD PRICE from the standpoint of the moving averages. The 50 DMA stands at 644.34, the 200 DMA at 623.80. Today's low was 632.90, just about the bottom of gold's trading channel. Since it's resting right there, on a trap door, so to speak, if it breaks down it would probably revisit the 200 DMA. There's plenty of support from 634 all the way to 618.

The SILVER PRICE, too, is resting on its bottom channel line, so could break up or down, either way. We've come this far, so I'd be surprised if it didn't at least during the day kiss its 200 DMA at 1226.15. Today's low was 1237. Fact is, silver & gold must be somewhere near a bottom. Otherwise a much greater correction is in the offing.

The GOLD/SILVER RATIO climbed above 50 today to close at 50.61. 200 DMA stands at 51.11. Here is another contribution to the case for a bottom being near in metals. If the ratio does NOT stop there, then look for that much bigger correction.

Surprise of the day came from the US DOLLAR INDEX which rose 42 basis points to close above 84.16. A good place for this reaction to stop would be 84.75. Call me hard-headed, but I don't think the dollar's downside is over yet.

How about those STOCKS, huh? Last Thursday the Dow made a low close at 12,059. Against this relentless downward bias and building panic in the investing public clearly 12,000 has become the line the Dow must hold. If not, next stop 11,200.Twould be surprising -- & a sign of great weakness -- if stocks did not stage at least an anemic rally this week.

How is a 200 day moving average figured? Take the last 200 days' prices and divide by 200. Next day, drop the oldest price and add today's.

Moving averages give us a measure of market extremes. The farther a market (headed up or down)pulls away from its 200 day moving average, the greater the likelihood it will switch directions. From time to time, markets always re-visit those 200 day moving averages. With that in mind, let's look at metals.

The DOW in GOLD DOLLARS has climbed off its recent low of G$369.25 (17.86 oz) to G$391.67 (18.95 oz). Sorry, it's not a sign of life. That only raises the DIG$ high enough to touch its 200 day moving average. Trend remains irrevocably down. Look for a further drop this week.Argentum et aurum comparenda sunt ---- Gold and silver must be bought.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Friday, March 02, 2007

On last Friday I wrote that the Dow had made the first part of a key reversal -- a break into new higher territory with a lower close for the week -- and so could be expected to drop. I wasn't looking for what happened. The Dow had its worst day since September 2001, after the 9/11 "attacks". The S&P500 sank below the psychologically important 1,400 level. Demoralisation is everywhere, and the stench of death. Were I the Nice Government Men (which I clearly am not, neither am I kin to them) of the Plunge Protection Team I would be working next week like an electric slave to get that Dow up. Ergo, look for a rally next week, anaemic though it be. A rally of some sort is likely, even as high as the previous high, but this is the shuddering of a corpse, not the breathing in of new life. Sell stocks for silver & gold.

And if stocks suffered this week with a 533 point drop, what about silver, dropping 12%? Or gold, down $41.60 or 6.1%? I warned y'all last week that a correction was coming, although I didn't expect one this big. What caused it to snowball so?

First off, it's a large correction but doesn't fall outside usual boundaries, it just fell faster than normal. In four days silver fell from the top of its trading channel to the bottom. Klunk. Today. If gold had done the same it would be trading around 612 today. But my point is that markets travel from top to bottom & bottom to top of trading channels. No news there. So what hit silver & gold?

In a word, the yen carry trade is unwinding. The geniuses of the Japanese central bank, the Bank of Japan, have been keeping the yen artificially low with interest rates at or near zero for a long time. Back up the truck and get a free load of money! The BoJ didn't have to offer that twice to hedge funds who have both the morality & ruthlessness of a great white shark. Borrow yen and get free money, take proceeds and buy stocks or gold or silver or commodities and ride the wave to Richville. What one event could sour this beautiful picture? The yen rising against the dollar.And today the yen hit its highest mark in 11 weeks against the dollar, on top of the panic that began in Shanghai on Wednesday. So terrified yen-carry-trade players, caught between a rising yen (which they owe) and falling gold (which they own) sell silver & gold & buy yen as fast as they can.

At these levels SILVER and GOLD should begin tempting buyers. Below the bottom of silver's trading channel lies its 200 day moving average at 1229, which should stop any further falls, IF silver wants to fall further still. Gold might fall as low as 634, another 10 bucks, but could just as well stop here. This correction could last as long as six weeks, but hark! The lows usually come early in the correction, so if we haven't seen them already, they ought to come on Monday or Tuesday next week.

The Gold/Silver Ratio rose. The 200 DMA stands above it at 51.13, the top channel line about 54.6. If the ratio reaches either of those points, I would swap more gold for silver. However, that 200 DMA is as high as I think it's likely to move.

Now before y'all chew your fingernails up to your elbows, think! Volatility is normal in silver; if you can't stand the heat, stay out of the kitchen. Also, stand back and look at the primary trend, the multi decade trend: for silver and gold that trend is up, up, up.

A rational person expects corrections, and uses them as opportunities to add to long positions. Look for metals to settle next week and begin to rise. If this correction follows the pattern of the other big ones in this bull market, the worst damage is done in the first week or so. That makes it the best time to buy. Keep a sharp eye next week, and buy silver at 1250 or 1230 and gold at 638 or 634.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.

Thursday, March 01, 2007

The GOLD PRICE came under attack from the opening bell, held out until noon, then faded, closing down 7.10. The SILVER PRICE held out until noon-thirty, broke below 1400, then fell almost at once to a 1340 low. Not beaten it clawed and scratched its way to a close above 1350 at 1353, down 57 cents.

First, I was wrong about the silver support. Clearly it stood at 1350, not 1380. Call it a guess, but we might have seen the bottom of silver's correction today. The Gold/Silver ratio shot up to 48.75, past the 50 Day Moving Average at 48.67. Target could be the 200 DMA at 51, but if so the silver correction will be long and cruel.

Silver broke its 17 DMA today & the 50 DMA stands at 1323. The 200 DMA (1227) is way, way below the bottom channel line, today about 1290. Looking at it now, I see that the three corrections beginning in June 2006 all fell all the way to the 200 DMA, but at that time the DMA also was paralleling the bottom line of the trading channel, so we could see lower silver prices. That would probably inveigle gold into dropping as low as 645 or even 638. Mmmmm . . . Looking at that chart, I wonder why my gut is so friendly toward silver. Maybe the correction will last 6 weeks & take it much lower.

When times get tough, lift up your eyes and ask, "Where is that primary trend?" Remind yourself of that longer term, wider perspective. When you remember that silver and gold are in a bull market, you can keep your eyes open to acquire more.

STOCKS today put in a kind of double bottom with Tuesday's low at 12,100 & today's 12,059. Look for a rally from here. Use it as your chance to bail out of stocks and buy silver and gold with the proceeds.

US DOLLAR INDEX rallied today, but made no move of substance or meaning. Illusion, all illusion. Argentum et aurum comparenda sunt ---- Gold and silver must be bought.

To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.